But Wall Street has made incredible profits off of the 401(k) - because that is who it was designed to benefit.
Today’s structural problems are bigger than Biden - but the foolish Green Utopians who own and operate him have made those problems much worse than they had to be.
> the 401(k) simply can’t work as a simultaneously growth-oriented and safe retirement vehicle <
I agree. In a way, growth and safety are opposites when it comes to investing. (I know time is a factor, too.)
I myself follow the (imperfect) rule of stock percentage = 100 - your age.
It works for me. But I do worry about what I’m going to do once I’m over 100 years old. 🙂
Anyway, many mutual fund companies now offer funds that automatically get less stock-heavy as you get older. That makes sense too.
“the 401(k) simply can’t work as a simultaneously growth-oriented and safe retirement vehicle. It was not a bad idea as a supplement to an old-style defined benefit plan, but it can’t reliably replace it. There is too much abstraction between a share of stock and the underlying company operating profits that it purports to represent - and the burden on the average investor to try to figure that out has grown much too high.”
An investor doesn’t really need to figure out much. Many 401Ks have the choice of multiple funds including one that sort of mirrors the S&P 500. You don’t want to invest it all in a single stock. Invest 10-20% or more of your paycheck in the equivalent of the S&P 500 index fund and leave it alone for 30 years or more. You will likely achieve critical mass. aka Lazy investing.
The problem is not 401Ks or the market. The problem is many people will not invest 20% of their take-home pay into a retirement fund and leave it alone for 30-40 years.